Viewpoint column + Greece | The Guardianhttps://www.theguardian.com/business/series/viewpointcolumn+world/greece
model.DotcomContentType$TagIndex$@18c5159aen-gbGuardian News and Media Limited or its affiliated companies. All rights reserved. 2018Sun, 18 Feb 2018 05:08:07 GMT2018-02-18T05:08:07Zen-gbGuardian News and Media Limited or its affiliated companies. All rights reserved. 2018The Guardianhttps://assets.guim.co.uk/images/guardian-logo-rss.c45beb1bafa34b347ac333af2e6fe23f.pnghttps://www.theguardian.com
Christine Lagarde's strong stance reveals weakness of Greek positionhttps://www.theguardian.com/world/2015/may/28/christine-lagardes-strong-stance-reveals-weakness-of-greek-position
<p>IMF chief’s comments that a Greek exit from the eurozone is a possibility show that the country’s creditors have tired of Syriza<br></p><p>For anyone who believes Greece should stick with the euro, her comments were ominous. Christine Lagarde, the boss of the International Monetary Fund, said <a href="http://preview.gutools.co.uk/world/2015/may/28/greece-economy-bankruptcy-high-level-political-trade-needed">Greece’s exit from the eurozone is a possibility</a> – but it would not signify an end to the single currency.</p><p>Together, these statements show that while a Greek exit is not the preferred option, it is a realistic proposition for which plans have been made.</p> <a href="https://www.theguardian.com/world/2015/may/28/christine-lagardes-strong-stance-reveals-weakness-of-greek-position">Continue reading...</a>GreeceChristine LagardeEuroEuroEurozoneEurozone crisisSyrizaInternational Monetary Fund (IMF)PortugalIrelandSpainYanis VaroufakisAlexis TsiprasSports Direct InternationalMike AshleyZero-hours contractsBusinessEuropeEuropean UnionRetail industryWorld newsThu, 28 May 2015 18:45:14 GMThttp://www.theguardian.com/world/2015/may/28/christine-lagardes-strong-stance-reveals-weakness-of-greek-positionPhotograph: Sean Gallup/Getty ImagesPhotograph: Sean Gallup/Getty ImagesPhillip Inman2015-05-28T18:45:14ZEurope is out of denial but no nearer a solutionhttps://www.theguardian.com/business/2011/sep/26/europe-out-of-denial-but-no-nearer-solution
It is hard to believe that Europe can overcome the sheer complexity of agreeing a €2tn fund among 17 nations within six weeks<p>'Believe it when you see it' has been a reasonable stance to adopt when assessing the eurozone's stumbling responses to its sovereign debt crisis. So it remains after the Washington pow-wow.</p><p>It is easy to accept that eurozone leaders, assaulted by demands from the International Monetary Fund, the US and others to raise their game, could pledge to consider radical remedies. It is harder to believe that, when faced with suspicious electorates at home and the sheer complexity of assembling a €2tn (£1.7tn) war chest, good intentions can be turned into firm commitments within six weeks – George Osborne's (probably realistic) deadline.</p> <a href="https://www.theguardian.com/business/2011/sep/26/europe-out-of-denial-but-no-nearer-solution">Continue reading...</a>BusinessEuroCurrenciesEuropeWorld newsGreeceInternational Monetary Fund (IMF)EconomicsGlobal economyMon, 26 Sep 2011 20:04:30 GMThttp://www.theguardian.com/business/2011/sep/26/europe-out-of-denial-but-no-nearer-solutionPhotograph: Dominique Faget/AFP/Getty ImagesThe European Central Bank in Frankfurt, Germany – obliging it to provide bailout funds will ring alarm bells in Germany particularly Photograph: Dominique Faget/AFP/Getty ImagesPhotograph: Dominique Faget/AFP/Getty ImagesThe European Central Bank in Frankfurt, Germany – obliging it to provide bailout funds will ring alarm bells in Germany particularly Photograph: Dominique Faget/AFP/Getty ImagesNils Pratley2011-09-26T20:04:30ZDon't bank on BNP's fightback bravadohttps://www.theguardian.com/business/2011/sep/14/bnp-paribas-economic-fightback
The biggest bank may have a logical, detailed and coherent battle plan but investors are distinctly underwhelmed<p>As Moody's <a href="http://www.theguardian.com/business/blog/2011/sep/14/french-banks-downgraded-europe-debt-crisis" title="Guardian: EU debt crisis">downgraded the credit ratings</a> of Crédit Agricole and Société Générale, BNP Paribas – the biggest bank in the eurozone – led the French fightback. On the face of things, it was an impressive effort. Capital? No problem, our core ratio is already 9%-plus and we're generating healthy profits. A Greek default? Easily manageable: the exposure is €4bn, we've already written down €500m, and even a 50% haircut wouldn't hurt terribly – it would merely wipe out a couple of months' profits. Funding? We'll get smaller, by shedding €70bn of assets and head off any difficulty in getting hold of dollars.</p><p>This apparently reassuring narrative was greeted with a 4% fall in BNP's share price, even after a 40% fall over the past couple of months. What's the problem? It's threefold. First, even a hint that US money markets are not lending freely to big European banks is alarming. Second, and more importantly, even radical moves to address funding pressures only buy time – nobody believes the eurozone crisis can be solved happily within six months, so French banks, heavily reliant on wholesale markets, could be running up a "down" escalator. Third, as everybody knows, French banks' exposure to southern Europe doesn't end in Greece; the fall-out from default in Athens is the bigger worry.</p> <a href="https://www.theguardian.com/business/2011/sep/14/bnp-paribas-economic-fightback">Continue reading...</a>BusinessBankingSociété GénéraleFranceEuropean banksTimothy GeithnerGreeceCrédit AgricoleBNP ParibasEuropeWed, 14 Sep 2011 19:39:25 GMThttp://www.theguardian.com/business/2011/sep/14/bnp-paribas-economic-fightbackPhotograph: Jacques Demarthon/AFP/Getty ImagesBNP suffered a 4% fall in its share price – on top of the 40% it has dropped over the past couple of months Photograph: Jacques Demarthon/AFP/Getty ImagesPhotograph: Jacques Demarthon/AFP/Getty ImagesBNP suffered a 4% fall in its share price – on top of the 40% it has dropped over the past couple of months Photograph: Jacques Demarthon/AFP/Getty ImagesNils Pratley2011-09-14T19:39:25ZFrench translations of Greek debt valueshttps://www.theguardian.com/business/2011/aug/30/french-banks-greek-debt
Some banks run the risk of going bust if they are forced to write off bigger slices of their loans to troubled eurozone states<p>Transparency is a word that French banks find difficult to understand. At least, that is the view of global accounting regulators, <a href="http://www.theguardian.com/business/2011/aug/30/european-banks-greek-debt" title="Guardian: Banks 'may have inflated balance sheets'">who have stepped in to the row over how to value loans made to Greek banks</a>. It is an important question because continental banks have loaned a large proportion of their spare cash to Greece, Spain, Portugal and Italy.</p><p>French banks, which still have a statist whiff about them after years as General de Gaulle's playthings, may have shied away from investment in American sub-prime mortgages, which the Germans lapped up, but they liked saying yes to debt-addicted Greeks.</p> <a href="https://www.theguardian.com/business/2011/aug/30/french-banks-greek-debt">Continue reading...</a>BusinessEurozone crisisEuropean banksFranceEuropeWorld newsGreeceInvestingFinancial sectorTue, 30 Aug 2011 19:06:00 GMThttp://www.theguardian.com/business/2011/aug/30/french-banks-greek-debtPhotograph: Eric Piermont/AFP/Getty ImagesThe French bank BNP Paribas has cut the value of its Greek bank debt by 20%. Photograph: Eric Piermont/AFP/Getty ImagesPhotograph: Eric Piermont/AFP/Getty ImagesThe French bank BNP Paribas has cut the value of its Greek bank debt by 20%. Photograph: Eric Piermont/AFP/Getty ImagesPhillip Inman2011-08-30T19:06:00ZJapan's politics begin to hurt the economyhttps://www.theguardian.com/business/2011/aug/24/viewpoint-japan-european-debt-crisis
The resignation of yet another prime minister has contributed to Japan's credit-rating downgrade<p>Every nation fears a <a href="http://www.theguardian.com/business/2011/aug/24/japan-credit-rating-downgraded" title="Guardian: Japan downgrade">downgrade of their debt</a>, except Japan, or so it seemed on Wednesday. So muted was the reaction to Moody's message of riskier times ahead that the ratings agency's cut to AA3 barely registered on world markets.</p><p>Japan is strangely disconnected from the world financial system given its size, mainly because the Japanese themselves own so much of their own debt (about 95%) and many of the shares in Tokyo-listed corporations. This wraps the country in a soft insulation blanket that in turn absorbs the impact of attacks by foreign investors.</p> <a href="https://www.theguardian.com/business/2011/aug/24/viewpoint-japan-european-debt-crisis">Continue reading...</a>EuroGlobal economyEurozone crisisEuropeJapanEconomicsBusinessIrelandIreland bailoutAustriaFinlandGreeceAsia PacificWed, 24 Aug 2011 18:41:46 GMThttp://www.theguardian.com/business/2011/aug/24/viewpoint-japan-european-debt-crisisPhotograph: Yuriko Nakao/ReutersJapan's prime minister Naoto Kan whose resignation is worrying the markets. Photograph: Yuriko Nakao/ReutersPhotograph: Yuriko Nakao/ReutersJapan's prime minister Naoto Kan whose resignation is worrying the markets. Photograph: Yuriko Nakao/ReutersPhillip Inman2011-08-24T18:41:46ZEuropean Central Bank is fighting fires on all frontshttps://www.theguardian.com/business/2011/aug/18/european-central-bank-fighting-fires
The ECB needs the eurozone to stop quarrelling over the Greek bailout with US manufacturing weak and recession looming<p>Let's face it, another drop in investor confidence and <a href="http://www.theguardian.com/business/2011/aug/18/world-stock-markets-plunge-as-fears-of-recession-intensify" title="Guardian: World stock markets plunge as fears of recession intensify">another lurch downwards </a>in stock markets, had been coming. The contributors were important: a weak report from US manufacturers; a quarrel between eurozone members over collateral to be used in the Greek bailout; and a warning from Morgan Stanley that the world is veering dangerously close to recession. But these worries are all underpinned by the sense that policymakers still haven't grasped the severity of the crisis.</p><p>The big fightback on Tuesday by German chancellor Angela Merkel and French president Nicolas Sarkozy was presented as a major shift in thinking. In one sense it was – a new "economic government" for Europe, imposing budget disciplines on member states, sounds terribly important (if other countries agree to sign up: no guarantees there). But it would have been more useful 10 years ago, before the debts were racked up and before southern Europe became uncompetitive with the north.</p> <a href="https://www.theguardian.com/business/2011/aug/18/european-central-bank-fighting-fires">Continue reading...</a>European Central BankEurozone crisisEuroEuroEuropean UnionEconomicsWorld newsUS economyEuropean banksBusinessManufacturing sectorAngela MerkelNicolas SarkozyFranceGermanyGreeceSpainItalyEuropeThu, 18 Aug 2011 19:16:48 GMThttp://www.theguardian.com/business/2011/aug/18/european-central-bank-fighting-firesPhotograph: Yves Herman/ReutersGermany's chancellor Angela Merkel, Greece's PM George Papandreou, and France's president Nicolas Sarkozy. Photograph: Yves Herman/ReutersPhotograph: Yves Herman/ReutersGermany's chancellor Angela Merkel, Greece's PM George Papandreou, and France's president Nicolas Sarkozy. Photograph: Yves Herman/ReutersNils Pratley2011-08-18T19:16:48ZContagion uncontained in eurozonehttps://www.theguardian.com/business/2011/jul/25/greece-bailout-eurozone-debt-crisis
Thought it was all over? A third Greek bailout looks like only a matter of time. Get ready for more bitter rows over who pays<p>Meanwhile, last Thursday's solution to the eurozone's woes looks weaker by the day. In the fight against contagion, nothing has been achieved. The yield on 10-year Spanish bonds popped back above 6% yesterday and Italian 10-year yields stand at 5.66%. Such rates, if sustained for long periods, are simply unaffordable. Unsurprisingly, bank shares across Europe were also whacked yesterday.</p><p>The problem is twofold. First, the politicians didn't get to grips with the size of Greece's debt problems. After a round of modest haircuts for private-sector creditors and a reduction in the rate on the interest rate charged on the bail-out loans, the country's debt-to-GDP ratio should no longer hit 170% soon. But the revised figure – maybe 130% – still looks too high to allow Greece to recover. Its economy is still too uncompetitive and you have to be an extreme optimist to believe tax receipts will arrive when they are due.</p> <a href="https://www.theguardian.com/business/2011/jul/25/greece-bailout-eurozone-debt-crisis">Continue reading...</a>Eurozone crisisBusinessEuropean monetary unionGreeceWorld newsBondsMarket turmoilEuropeMon, 25 Jul 2011 19:56:24 GMThttp://www.theguardian.com/business/2011/jul/25/greece-bailout-eurozone-debt-crisisPhotograph: Yves Herman/ReutersThe European commission headquarters in Brussels. The European Financial Stability Facility has powers to intervene but no cash. Passing the hat round the eurozone again looks a tall order. Photograph: Yves Herman/ReutersPhotograph: Yves Herman/ReutersThe European commission headquarters in Brussels. The European Financial Stability Facility has powers to intervene but no cash. Passing the hat round the eurozone again looks a tall order. Photograph: Yves Herman/ReutersNils Pratley2011-07-25T19:56:24ZEurozone's woes continue as nothing has been done about contagionhttps://www.theguardian.com/business/2011/jul/25/debt-crisis-greece
Greek debt-to-GDP ratio should no longer hit 170%, but the revised figure – maybe 130% – still looks too high<p>Meanwhile, last Thursday's solution to the eurozone's woes looks weaker by the day. In the fight against contagion, nothing has been achieved. The yield on 10-year Spanish bonds popped back above 6% and Italian 10-year yields stand at 5.66%. Such rates, if sustained for long periods, are simply unaffordable. Unsurprisingly, bank shares across Europe were also whacked yesterday.</p><p>The problem is twofold. First, the politicians didn't get to grips with the size of Greece's debt problems. After a round of modest haircuts for private-sector creditors and a reduction in the rate on the interest rate charged on the bail-out loans, the country's debt-to-GDP ratio should no longer hit 170% soon. But the revised figure – maybe 130% – still looks too high to allow Greece to recover. Its economy is still too uncompetitive and you have to be an extreme optimist to believe tax receipts will arrive when they are due.</p> <a href="https://www.theguardian.com/business/2011/jul/25/debt-crisis-greece">Continue reading...</a>BusinessEurozone crisisGreeceWorld newsBondsMarket turmoilMon, 25 Jul 2011 19:56:18 GMThttp://www.theguardian.com/business/2011/jul/25/debt-crisis-greecePhotograph: Orestis Panagiotou/EPAA third Greek bailout looks like only a matter of time. Photograph Orestis Panagiotou/EPAPhotograph: Orestis Panagiotou/EPAA third Greek bailout looks like only a matter of time. Photograph Orestis Panagiotou/EPANils Pratley2011-07-25T19:56:18ZGreece debt crisis: Relief likely to be temporaryhttps://www.theguardian.com/business/2011/jul/22/greece-debt-relief-not-enough
Debt-relief for Greece doesn't look enough for a permanent solution, its debt-to-GDP ratio could emerge as high as 130%<p>On the second day, the euphoria faded. The rebound in bank shares came to a halt; the yield on Italian and Spanish debt rose slightly; and investors reflected that the euro leaders, despite their considerable skill in designing a package that tiptoed through a financial minefield, still face huge economic and political challenges. Barclays Capital caught the mood best – the result was "more than expected but not enough to make us sleep soundly".</p><p>First, the definite good news. The yield on Greek two-year debt has plunged from 40% to 28%. Clearly, even the lower rate shows Greece is miles away from being able to fund itself in the market. But the danger of an imminent chaotic default has been removed by the eurozone's softer stance on lending. The country will get €109bn (£96bn) of loans at 3.5%, ranging from 15 years to 30 years in length. The banks will volunteer (ie have their arms twisted) to join the relief effort, but not by so much as to trigger worries about holes being ripped in their balance sheets.</p> <a href="https://www.theguardian.com/business/2011/jul/22/greece-debt-relief-not-enough">Continue reading...</a>Eurozone crisisEuropean banksBusinessGreeceEuropeWorld newsBondsMarket turmoilFri, 22 Jul 2011 18:35:45 GMThttp://www.theguardian.com/business/2011/jul/22/greece-debt-relief-not-enoughPhotograph: Philippe Wojazer/REUTERSAngela Merkel and other eurozone leaders who designed a rescue package for Greece still face huge economic and political challenges. Photograph Philippe Wojazer/ReutersPhotograph: Philippe Wojazer/REUTERSAngela Merkel and other eurozone leaders who designed a rescue package for Greece still face huge economic and political challenges. Photograph Philippe Wojazer/ReutersNils Pratley2011-07-22T18:35:45ZMore flip-flops over Greece will not dohttps://www.theguardian.com/business/2011/jul/20/viewpoint-euro-summit
The summit in Brussels is about avoiding catastrophe<p>At the Brussels summit, eurozone leaders must produce a package that shocks and awes the market. More flip-flops over a Greek default will not do. More pretence that soaring bond yields in Italy and Spain can be dealt with another day will not work. More squabbling between politicians would be disastrous. As José Manuel Barroso, president of the European commission, put it : "Nobody should be under any illusion: the situation is very serious."</p><p>The easy bit – or easyish – is addressing the Greek debt crisis. It is clear the first bailout failed. The Greek economy, saddled with high debts and no growth, will not recover if the only medicine is austerity and more loans at unaffordable rates. Greece's problems are not a squall that will pass if only the bailouts keep coming. That approach just delays the day of reckoning. The solution starts with debt relief.</p> <a href="https://www.theguardian.com/business/2011/jul/20/viewpoint-euro-summit">Continue reading...</a>BusinessEuroCurrenciesEuropean monetary unionEuropean UnionGreeceAngela MerkelEuropeWed, 20 Jul 2011 19:52:45 GMThttp://www.theguardian.com/business/2011/jul/20/viewpoint-euro-summitPhotograph: Georges Gobet/AFP/Getty ImagesEuropean commission president Jose Manuel Barroso on the eve of the Brussels summit. Photograph: Georges Gobet/AFP/Getty ImagesPhotograph: Georges Gobet/AFP/Getty ImagesEuropean commission president Jose Manuel Barroso on the eve of the Brussels summit. Photograph: Georges Gobet/AFP/Getty ImagesNils Pratley2011-07-20T19:52:45ZEurozone crisis: Rescue Thursday or Black Friday?https://www.theguardian.com/business/2011/jul/18/eurozone-crisis-rescue-thursday-black-friday
The problem causing stockmarket panic is the refusal of eurozone leaders to act as if the single currency is at stake<p>Don't blame last Friday's stress tests on European banks for the <a href="http://www.theguardian.com/business/2011/jul/18/banks-eurozone-losses-rbs-lloyds-barclays" title="">rising sense of panic in bond and stock markets on Monday</a>. Yes, the stress tests, by ignoring the question of what happens if Greece defaults, failed to inspire greater confidence in the European banking system. The real problem, however, remains the same: the apparent refusal of eurozone leaders to act as if they believe that the survival of the single currency is at stake.</p><p>Where is the European Central Bank, ask bankers and investors. It's a fair question. The sight of Italian 10-year bond yields at 6% would, you might think, have been a cue for the central bank, the first line of defence against loss of investor confidence, to wade into the market and start buying Italian debt. Italy, saddled with high debts and low growth, cannot prosper if it is obliged permanently to pay such prices to borrow. A bond-buying spree by the ECB would have been taken by investors as a declaration that eurozone institutions will act to stop the rot. In the US, that's how the Federal Reserve would have reacted.</p> <a href="https://www.theguardian.com/business/2011/jul/18/eurozone-crisis-rescue-thursday-black-friday">Continue reading...</a>Eurozone crisisEuropeEuropean UnionEuroEuropean Central BankBankingGreeceInvestingStock marketsBusinessAngela MerkelBlack FridayEurozoneMon, 18 Jul 2011 20:00:13 GMThttp://www.theguardian.com/business/2011/jul/18/eurozone-crisis-rescue-thursday-black-fridayPhotograph: Michael Gottschalk/AFP/Getty ImagesEurozone leaders, including Angela Merkel, must act firmly to save the single currency. Photograph: Michael Gottschalk/AFP/Getty ImagesPhotograph: Michael Gottschalk/AFP/Getty ImagesEurozone leaders, including Angela Merkel, must act firmly to save the single currency. Photograph: Michael Gottschalk/AFP/Getty ImagesNils Pratley2011-07-18T20:00:13ZEuropean debt crisis: eurozone fallout is too late to controlhttps://www.theguardian.com/business/2011/jul/12/viewpoint-eurozone-fallout
Eurozone leaders have themselves to blame: the best time to force the banks to raise more capital was last year<p>The eurozone flirted with disaster on Tuesday. Italian 10-year bond yields touched 6%, a level that would prove ruinous for the eurozone's third-largest economy if sustained permanently. By the end of the day, Italian yields were back at 5.6%, presumably on the thought that even slow-moving eurozone politicians will now recognise the need for urgent action. But what will they do? The French debt rollover plan for Greek debt is dead, killed by the credit agencies' (reasonable) opinion that a restructuring cannot be described as voluntary if lenders' arms are being twisted. So some form of Greek default is now on the agenda.</p><p>Well, default was inevitable. Dispatching ever greater sums to a country that was labouring under an impossible debt burden didn't make sense. So best to make the act of default as clean as possible.</p> <a href="https://www.theguardian.com/business/2011/jul/12/viewpoint-eurozone-fallout">Continue reading...</a>European banksEuropeWorld newsEurozone crisisBusinessItalyGreeceTue, 12 Jul 2011 19:44:37 GMThttp://www.theguardian.com/business/2011/jul/12/viewpoint-eurozone-falloutNils Pratley2011-07-12T19:44:37ZItalian bond yields approaching disaster zonehttps://www.theguardian.com/business/2011/jul/11/debt-crisis-europeanbanks
Eurozone bond yields, once they pass 5.5%, have tended to accelerate upwards to the supposedly critical level of 7%<p>Spanish 10-year bond yields hit 6% today. Italy's climbed at a similar pace, reaching 5.7%, meaning its cost of 10-year borrowing has increased by a full percentage point since 6 June. These are big moves, which is why it's no exaggeration to say the crisis in the heart of the eurozone – as opposed to the drama at the periphery – is under way.</p><p>As Gary Jenkins at Evolution Securities pointed out, eurozone sovereign bond yields, once they pass 5.5%, have tended to accelerate upwards to the supposedly critical level of 7%. Two percentage points away from a "potential disaster scenario", he said of Italy – and that was before yesterday's 0.4% percentage point increase eliminated part of the buffer.</p> <a href="https://www.theguardian.com/business/2011/jul/11/debt-crisis-europeanbanks">Continue reading...</a>BusinessEurozone crisisEuropean banksItalyEuropeWorld newsGreeceMarket turmoilMon, 11 Jul 2011 20:19:02 GMThttp://www.theguardian.com/business/2011/jul/11/debt-crisis-europeanbanksNils Pratley2011-07-11T20:19:02ZMonetary union comes with a price taghttps://www.theguardian.com/business/2011/jul/06/emu-europe-news
The private sector is being press-ganged into supporting the Greek bailout, says Moody's<p>Wednesday was one of the bloodiest days on the debt markets this year. The cost of insuring loans issued by Greece, Portugal and Ireland soared after <a href="http://www.theguardian.com/business/2011/jul/06/portugal-downgrade-european-bank-shares" title="Guardian: Portugal downgrade">Moody's interrupted the wrangling </a>in the EU over how to bail out Greece for a second time with a Rapier missile.</p><p>The ratings agency warned that plans to engineer a rescue by forcing French and German banks into a "voluntary" rollover of Greek debt had terrible implications for Portugal. And while it didn't mention Ireland, everyone knows Dublin's debts are next in the firing line.</p> <a href="https://www.theguardian.com/business/2011/jul/06/emu-europe-news">Continue reading...</a>BusinessEuropean monetary unionEuropeEuroRating agenciesGreecePortugalIrelandFranceGermanySpainWed, 06 Jul 2011 19:39:06 GMThttp://www.theguardian.com/business/2011/jul/06/emu-europe-newsPhotograph: Geert Vanden Wijngaert/APJean-Claude Trichet, president of the European Central Bank. Photograph: Geert Vanden Wijngaert/APPhotograph: Geert Vanden Wijngaert/APJean-Claude Trichet, president of the European Central Bank. Photograph: Geert Vanden Wijngaert/APPhillip Inman2011-07-06T19:39:06ZThe Greek can of worms gets kicked down the roadhttps://www.theguardian.com/business/2011/jun/29/greek-can-of-worms-kicked-down-the-road
The vote is passed in Athens, and the bailout cash will flow. But the inevitable has only been postponed<p>That's one Greek crisis out of the way; get ready for the next. Today's vote in the Greek parliament merely ensures that default will not occur next month, and probably not this year. The European Union, the International Monetary Fund and the European Central Bank will now sign their outstanding cheques from the last bailout. Then they will prepare to write more cheques worth €100bn or so – but with extra strings attached. That's when the next crisis starts, and when default comes back into view.</p><p>The lenders have not even agreed on how to design a loan package that can impose modest levels of pain on creditors while not being deemed a "credit event" – the dreaded technical default. The French idea of obliging banks to roll over maturing debt – or encouraging them to "volunteer" to do so – is a contortion that could still fall apart when prodded over coming weeks.</p> <a href="https://www.theguardian.com/business/2011/jun/29/greek-can-of-worms-kicked-down-the-road">Continue reading...</a>Eurozone crisisGreeceEuropean banksEuropean monetary unionEuropean UnionEuropeBusinessWed, 29 Jun 2011 19:52:53 GMThttp://www.theguardian.com/business/2011/jun/29/greek-can-of-worms-kicked-down-the-roadPhotograph: Petros Karadjias/APRiot policeman stand in front of the Greek parliament as protesters throw back tear gas canisters. Photograph: Petros Karadjias/APPhotograph: Petros Karadjias/APRiot policeman stand in front of the Greek parliament as protesters throw back tear gas canisters. Photograph: Petros Karadjias/APNils Pratley2011-06-29T19:52:53ZRatings agencies are right to take a hard line on Greecehttps://www.theguardian.com/business/2011/jun/21/ratings-agencies-greece
Credit ratings agencies' inflexibility over Greek sovereign bonds may infuriate eurozone leaders, but realism is welcome<p>Credit rating agencies receive a lot of flak (much of it deserved: in a rational world, they would have been sunk by the top grades they awarded to sub-prime US mortgage junk) but their hard-line stance over a restructuring of Greek debts should be applauded.</p><p>A sovereign bond should do what it says on the tin. If an investor doesn't receive a coupon on the date originally advertised, that's a default.</p> <a href="https://www.theguardian.com/business/2011/jun/21/ratings-agencies-greece">Continue reading...</a>Rating agenciesFinancial sectorBusinessGreeceWorld newsEurozone crisisInvestingTue, 21 Jun 2011 19:56:56 GMThttp://www.theguardian.com/business/2011/jun/21/ratings-agencies-greecePhotograph: Pascal Rossignol/ReutersThe debt crisis in Greece has forced bond investors to renegotiate their loans. Photograph: Pascal Rossignol/ReutersPhotograph: Pascal Rossignol/ReutersThe debt crisis in Greece has forced bond investors to renegotiate their loans. Photograph: Pascal Rossignol/ReutersNils Pratley2011-06-21T19:56:56ZThe eurozone has dug itself a hole all the way to Hadeshttps://www.theguardian.com/business/2011/jun/20/eurozone-greece-big-hole
The leaders say they won't bail out Greece till it accepts further austerity measures – but everyone knows this isn't true<p>The eurozone leaders have dug themselves into a terrible hole. They say they can't dispatch funds to Athens until the Greeks sign up to further austerity and pledge to stick to their commitments better than they did the first time. But this threat doesn't carry credibility. Everybody, including Greece, suspects the cash would be forthcoming if financial catastrophe loomed, as it does now. That is because the eurozone has no alternative strategy: there is no plan to cope with the consequences of a Greek default.</p><p><a href="http://www.theguardian.com/business/2011/jun/20/eurozone-must-act-greek-debt-crisis-imf" title="The International Monetary Fund">The International Monetary Fund</a> (IMF), in calling for "a more cohesive and co-operative approach to manage the crisis in the periphery", raised the stakes several more notches. Get your act together, the IMF told eurozone leaders. Quite right, too: the idea that the application of more sticking plasters can delay a crisis until 2013, when a permanent lending mechanism is established, has been exploded over the past fortnight. The Greek crisis has to be resolved before then.</p> <a href="https://www.theguardian.com/business/2011/jun/20/eurozone-greece-big-hole">Continue reading...</a>GreeceInternational Monetary Fund (IMF)Eurozone crisisEuropean UnionEuropean banksEconomicsGlobal economyBusinessEuropeWorld newsAusterityMon, 20 Jun 2011 19:52:43 GMThttp://www.theguardian.com/business/2011/jun/20/eurozone-greece-big-holeNils Pratley2011-06-20T19:52:43ZGreek default is inevitablehttps://www.theguardian.com/business/2011/jun/16/viewpoint-greece-bailout
Let's forget the idea that Greece can ever repay its debts – the numbers just don't stack up<p>The prospect of disaster, and the sight of riots, concentrates minds. The European Union and the International Monetary Fund seem to be on the point of <a href="http://www.theguardian.com/business/2011/jun/16/greek-crisis-rocks-world-markets" title="Guardian: Greek crisis hits world markets">agreeing to dispatch €12bn </a>to Greece. That will buy a few more weeks to try to put together a more comprehensive package, assuming the Greeks can somehow be persuaded to sign up for more austerity measures. Gradually, however, the notion is being eroded that Greece can somehow honour its debts. The arithmetic just isn't credible.</p><p>Charles Dumas, of Lombard Street Research, puts it best. He calculates that to stabilise Greece's government debt-to-GDP ratio at 142% (the figure at the end of 2010) would require the budget surplus to be 7%-10% of GDP. The figure was minus 10% in 2009 and is likely to be at least minus 4% in 2010. Now recession is causing tax receipts to crumble. The chances of a 7%-10% surplus are "virtually nil", says Dumas, "meaning debt will escalate indefinitely, which is hardly surprising since only growth (or default) can reliably take care of a major debt problem." In some form, there will be a default.</p> <a href="https://www.theguardian.com/business/2011/jun/16/viewpoint-greece-bailout">Continue reading...</a>Eurozone crisisBusinessGreeceEuropeWorld newsEuropean banksEuropean monetary unionInternational Monetary Fund (IMF)EconomicsGlobal economyEuropean UnionThu, 16 Jun 2011 19:41:38 GMThttp://www.theguardian.com/business/2011/jun/16/viewpoint-greece-bailoutPhotograph: John Kolesidis/REUTERSRiot policemen during clashes in Athens. Efforts to impose cuts to meet lenders' demands for austerity have sparked fierce resistance. Photograph: John Kolesidis/ReutersPhotograph: John Kolesidis/REUTERSRiot policemen during clashes in Athens. Efforts to impose cuts to meet lenders' demands for austerity have sparked fierce resistance. Photograph: John Kolesidis/ReutersNils Pratley2011-06-16T19:41:38ZGreece is fast approaching the point of no returnhttps://www.theguardian.com/business/2011/jun/15/greece-debt-default-eurozone-austerity
An uncontrolled debt default by Athens is suddenly starting to seem a horrible possibility<p><a href="http://www.theguardian.com/world/2011/jun/15/greece-general-strike-parliament-clashes" title="Guardian: Greece general strike prompts violent clashes in Athens">Greeks rioted</a> , the country's prime minister offered to resign and the yield on Greek two-year sovereign bonds hit 28%. Meanwhile, the Dow Jones industrial average fell 190 points at one stage. Markets are carrying a simple message: we fear politicians and policymakers are losing control of the plot. The long-feared "Lehman moment" – an uncontrolled debt default by Greece, with the impact being felt across the eurozone banking system – suddenly seems a horrible possibility.</p><p>Investors' worries are understandable. The past month has seen the European Central Bank and eurozone politicians squabble over the design of the next bailout package for Athens. Private sector investors must share some pain, <a href="http://www.theguardian.com/business/2011/jun/08/german-finance-minister-calls-for-greek-debt-restructuring-as-condition-of-bailout" title="Guardian: Germany wants private creditors to share burden of new Greek bailout">says German finance minister Wolfgang Schäuble</a>, if German taxpayers' money is to be dispatched. Unacceptable, says the ECB, we cannot allow anything that looks like a debt default, it would be too dangerous.</p> <a href="https://www.theguardian.com/business/2011/jun/15/greece-debt-default-eurozone-austerity">Continue reading...</a>Eurozone crisisGreeceEuropean Central BankEuroBusinessEuropeWorld newsWed, 15 Jun 2011 19:21:57 GMThttp://www.theguardian.com/business/2011/jun/15/greece-debt-default-eurozone-austerityPhotograph: KPA/Zuma/Rex FeaturesRenewed rioting in Athens worries investors as bankers and eurozone politicians squabble over the next bailout package. Photograph: KPA/Zuma/Rex FeaturesPhotograph: KPA/Zuma/Rex FeaturesRenewed rioting in Athens worries investors as bankers and eurozone politicians squabble over the next bailout package. Photograph: KPA/Zuma/Rex FeaturesNils Pratley2011-06-15T19:21:57ZGreece will crash, so build up the buffershttps://www.theguardian.com/business/2011/may/09/greece-european-debt-crisis
Deficit-reduction targets have been missed and the economy is a mess<p>Here we go again. A year after Greece was handed €110bn (£96bn) in soft loans by the European Union and the IMF, Athens needs more. The big idea 12 months ago was that, by now, investors would be applauding Greece's austerity measures and would be rushing to lend. Nothing of the sort has happened. Deficit-reduction targets have been missed and the economy is a mess.</p><p>The obvious conclusion is that the bailout is not working and that Greece's debts, which are forecast to peak at 160% of GDP, are too high to allow the country's economy to recover. In that case, eurozone leaders should stop pretending that more budget cuts and more calls for the Greeks to privatise state assets will make the numbers add up eventually. They should instead start talking about ways to reduce Greece's debts and think about how to contain the knock-on damage to eurozone banks that hold Greek bonds.</p> <a href="https://www.theguardian.com/business/2011/may/09/greece-european-debt-crisis">Continue reading...</a>BusinessGreeceEuropeWorld newsEurozone crisisEuropean banksInternational Monetary Fund (IMF)EconomicsGlobal economyMon, 09 May 2011 20:09:59 GMThttp://www.theguardian.com/business/2011/may/09/greece-european-debt-crisisPhotograph: Orestis Panagiotou/EPAPresidential guards in front of the parliament in Athens. Markets view a default by Greece as inevitable. Photograph Orestis Panagiotou/EPAPhotograph: Orestis Panagiotou/EPAPresidential guards in front of the parliament in Athens. Markets view a default by Greece as inevitable. Photograph Orestis Panagiotou/EPANils Pratley2011-05-09T20:09:59Z